U.S. stocks closed broadly lower Wednesday, erasing an early gain, as investors reacted to a late-afternoon surge in bond yields.
Bond yields climbed to their highest level in four years after the Federal Reserve released minutes from its latest policy meeting. The minutes showed bullish sentiment among policymakers, confirming their intention to raise interest rates this year.
The yield on the 10-year Treasury note rose sharply after the minutes came out, touching 2.95 percent, its highest level since January 2014. Higher bond yields indicate investors expect more risk of inflation.
The Standard & Poor’s 500 index fell 14.93 points, or 0.5 percent, to 2,701.33. The Dow Jones industrial average lost 166.97 points, or 0.7 percent, to 24,797.78. The blue chip average had been 300 points higher before the late-afternoon slide.
The Nasdaq gave up 16.08 points, or 0.2 percent, to 7,218.23. The Russell 2000 index of smaller-company stocks shed most of its gains from earlier in the day. It inched up 1.84 points, or 0.1 percent, to 1,531.84.
The major stock indexes started the day on pace to recoup some of the market’s losses from a day earlier as investors sized up the latest crop of company earnings.
The yield on the 10-year Treasury, which is used as a benchmark for mortgages and other loans, has been rising in recent months from a recent low of 2.04 percent in September.
The pickup in yields has begun to make bonds more attractive as an alternative to stocks, which makes some investors uneasy.
Despite the broader market slide, investors bid up shares in some companies that reported better-than-expected earnings or outlooks Wednesday.
Advance Auto Parts vaulted 8.2 percent after reporting better earnings than analysts were expecting. The stock was the biggest gainer in the S&P 500, adding $8.65 to $114. Shares in rival auto parts retailer AutoZone also rose, climbing $6.26, or 0.9 percent, to $719.49.
La-Z-Boy also got a lift from its latest quarterly report card, rising $2.85, or 9.9 percent, to $31.75.
Walmart shares continued to slide Wednesday, a day after posting its biggest single-day drop in 30 years. The stock lost $2.59, or 2.8 percent, to $91.52.
Devon Energy slid 11.8 percent after the energy company disclosed a smaller-than-expected profit and 2018 forecast that raised concerns with analysts. The stock gave up $4.08 to $30.57.
Benchmark U.S. crude fell 11 cents to settle at $61.68 per barrel in New York. Brent crude, used to price international oils, rose 17 cents to close at $65.42 per barrel in London.
In other energy futures trading, heating oil was little changed at $1.93 a gallon. Wholesale gasoline added a penny to $1.76 a gallon. Natural gas rose 4 cents to $2.66 per 1,000 cubic feet.
The dollar rose to 107.78 yen from 107.30 yen on Tuesday. The euro weakened to $1.2300 from $1.2336.
Gold rose 90 cents to $1,332.10 an ounce. Silver added 18 cents to $16.62 an ounce. Copper gained 3 cents to $3.22 a pound.
Major indexes in Europe ended mostly higher. Germany’s DAX slipped 0.1 percent, while France’s CAC 40 rose 0.2 percent and Britain’s FTSE 100 added 0.5 percent.
In Asia, Japan’s Nikkei 225 index climbed 0.2 percent and Hong Kong’s Hang Seng gained 1.8 percent. Australia’s S&P ASX 200 edged 0.1 percent higher. The Kospi in South Korea added 0.6 percent. India’s Sensex gained 0.3 percent.